Case Background
A critical action when starting a business is to consider various factors that will further influence its formation. In the context of the case under study, the initiator of creating the Jeremy lawn care company faces the primary task of choosing between such types of business organization as sole proprietorship or partnership. The complexity of the choice lies in the fact that each of these types implies the presence of both advantages and disadvantages, which must be carefully analyzed before making a decision.
Sole Proprietorship Advantages and Disadvantages
One of Jeremy’s alternatives is to start a company providing lawn care services with his father. The main advantage of this approach is limiting the amount of documentation that may be required. This is because, in this process, there is no need to create a separate business or trade name, and regulatory or legal documents are required when involving an outsider.
The most essential requirement for individuals wishing to have sole proprietorship is acquiring a license or permit. The next advantage of this type is gaining complete control over the actions and decision-making process regarding its main aspects and further development. The involvement of such a figure as a father does not require particular legal and regulatory forms since consensus or approval can be achieved personally and with joint efforts.
On the other hand, significant disadvantages may arise when choosing this type of business. First of all, it may imply increased responsibility on the part of the company’s head. In other words, if problems arise, such as debt or liability (Ozoda, 2023), Jeremy will have to solve them with the help of personal resources. Moreover, the limited number of skills and opportunities that can be provided by attracting additional persons to conduct business can be harmful.
Partnership Advantages and Disadvantages
In this scenario, several positive aspects can also be highlighted when choosing such a type of business activity as a partnership. The first advantage distinguishing it from sole proprietorship is the provision of different perspectives on the problem or solution. Thus, if Jeremy decides to ask his co-workers at the company he works for to partner in his new lawn care company, they can make joint strategic decisions that show greater efficiency due to different knowledge, skills, and experience.
In addition, the advantage of a partnership is the division of responsibilities, which also includes such critical aspects as risks. In other words, if any problems arise, the parties involved in doing business are responsible and burdened. Moreover, if there is a lack of skills and capabilities with sole proprietorship, then with partnership, this characteristic will benefit the company.
Despite the advantages of partnership, this business organization has several disadvantages. The leading is the possibility of disagreements and conflict between the stakeholders involved. This is due to the introduction and complexity of navigating personal relationships during business communication, especially in cases when the goals and intentions of individuals begin to diverge. To limit this problem, it is necessary to be able to find a compromise. Another disadvantage is the need to fill out and provide much documentation by involving another individual in the business. Taking into account these aspects should be considered when choosing this kind of organization.
Organizational Structure Opinion
I think partnership is the best form of doing business for Jeremy. First, it will provide the necessary resources to start a business since a lawn services company requires a relatively large amount of investment. Furthermore, the partnership provides an opportunity to make more thoughtful and balanced decisions due to the lengthy discussion between business leaders and the provision of various perspectives. Due to this feature, Jeremy’s company will be able to achieve tremendous success and rapid promotion.
Resources Needed
When promoting an initiative to create a lawn services business, it is necessary to have several essential resources for the company’s smoothest and most successful start. This aspect is essential for small business owners to consider because of the limited resources on the distribution of which the effectiveness of the functioning of other areas of activity depends.
Therefore, first of all, Jeremy faces the task of acquiring sufficient financial resources that will be required for many aspects of the future business. This aspect may include the purchase of tools or payment for the services of a consultant or lawyer who can help with the necessary documentation. It is also worth emphasizing that to promote small businesses, it is imperative to pay attention to marketing (Liguori & Pittz, 2020). The promotion strategy will positively impact the company’s growth and the cultivation of capital.
One of the primary resources that may require the most significant amount of finance is acquiring tools and equipment. This is necessary because this type of service implies the use of specific machinery and does not imply the performance of any actions by hand. Depending on customer requests, lawnmowers, leaf blowers, edgers, trimmers, and other landscaping tools may be required among the most necessary tools. In addition, the equipment may also imply the purchase of a vehicle on which the tools will be transported.
The following vital resource for the smoothest and most successful start of the lawn services business is a precise distribution of the legal and regulatory side. This feature implies the acquisition of such vital components as a business license, lawn care business insurance, and setting up business banking and accounting (“How to start a lawn care business: The complete guide,” 2023). This process will provide an opportunity to limit problems such as debts, fines, or liabilities.
Failure Factors
Before a small business, there are many factors that, with insufficient attention, can lead to failure. Insufficient financial resources become one of the main ones (Rachapaettayakom et al., 2020). Incorrect management of the company’s budget, which leads to its rapid depletion and bankruptcy, can also be attributed to this aspect. In some cases, managers trying to save the business begin to invest additional personal finances, which can aggravate the situation and get them into severe debt.
Another factor is inefficient planning, both development strategy and marketing. This may result from the lack of demand for the company and its services and loss of profit. It is also worth paying attention to such an essential factor as obtaining permits to implement activities. Due to insufficient documentation, the company may become a victim of fines and liabilities, leading to failure.
References
How to start a lawn care business: The complete guide. (2023). Jobber. Web.
Liguori, E. W., & Pittz, T. G. (2020). Strategies for small business: Surviving and thriving in the era of COVID-19. Journal of the International Council for Small Business, 1(2), 106-110. Web.
Ozoda, Q. (2023). The classifications and the types of business ownership. International Journal of Formal Education, 2(10), 133-141.
Rachapaettayakom, P., Wiriyapinit, M., Cooharojananone, N., Tanthanongsakkun, S., & Charoenruk, N. (2020). The need for financial knowledge acquisition tools and technology by small business entrepreneurs. Journal of Innovation and Entrepreneurship, 9, 1-28. Web.